First Abu Dhabi Bank P.J.S.C. (FAB) Earnings Call Transcript & Summary

Hello, and welcome to the First Abu Dhabi Bank Q3 2023 Results Call. My name is Alex. I'll be coordinating the call today. [Operator Instructions] Please note, the media are not allowed to participate on this call. This call is for investors and analysts only. I'll now hand it over to your host, Sofia El Boury, to begin. Please go ahead.

Thank you, Alex. Good afternoon, everyone. Thank you for joining us today in order to review FAB's financial performance for the third quarter and first 9 months of 2023. Group results were announced this morning premarket, and all our disclosures are currently available on the dedicated IR section of our corporate website as well as on the IR app. Today's call is hosted by our senior management team, represented by our group Chief Financial Officer, Lars Kramer; our Group Chief Risk Officer, Pradeep Rana; and our acting Group Chief Credit Officer, Rajesh Deshpande. They will all be here to answer your questions at the end of the short presentation. So without further ado, I will now pass it on to Lars for the presentation.

Thanks, Sofia. Good afternoon, good morning, everyone. Welcome to all the analysts and investors tuning into our call today. On behalf of the Board and senior management, I'm very pleased to present FAB's financial results for the third quarter and first 9 months of 2023, which were announced earlier this morning. I'll go through the slides of the investor deck fairly quickly to allow more time for Q&A. And Pradeep, our CRO, will join me for that. So turning to the first slide in the earnings presentation. Building on very strong momentum in the first half of 2023, FAB delivered another record performance in the third quarter. The Q3 '23 net profit was AED 4.3 billion, which was up 46% year-on-year and 1% sequentially. This brings the 9 months '23 net profits to AED 12.4 billion, which is up 58% year-on-year on an underlying basis, implying a RoTE of 18.3%. This record performance clearly demonstrates solid progress against the group's growth strategy and it further emphasizes FAB's status as the region's financial institution of choice and a facilitator of global trade and investments. Strong business volumes, revenue expansion and continued cost and risk discipline all contributed to these results, while the operating backdrop remained favorable and continue to represent a tailwind for us. Commercial momentum was very healthy during the period with customer deposits up at 12% year-to-date, which is an inflow of AED 85 billion, and it includes AED 55 billion of growth in CASA balances. Although marginally down sequentially due to repayments, loans are still up 4% year-to-date, and this was in line with our full year guidance and underlining market share gains in key segments, accelerated customer onboarding as well as acquisitions. Revenue grew 38% year-on-year from diversified sources. Both the NII and NFI recorded double-digit growth with noninterest income now contributing 35% to group revenue, which is up 33% from the 33% in the prior comparative period. And this is demonstrating the benefits of our diversified franchise. The group presents outstanding operating efficiency with a cost-to-income ratio of 25.4%, and this is notably improving from 30.9% in the 9 months last year and on the back of positive jaws. Our asset quality remained very strong with our NPL ratio still below 4% and with adequate provision buffers well above guidance. The group operates from a rock solid balance sheet foundation with LCR and NSFR comfortably above regulatory requirements and group CET1 reaching 14.2%, underlining strong capital accretion year-to-date. Last, but not least, in 2023, FAB's AA- credit rating or its equivalent was affirmed by all major rating agencies, most recently by Fitch with a stable outlook. This is the strongest combined credit rating of any other bank in MENA and for us, a key differentiating factor underpinning the group's structural strength and resilience through all cycles. Turning to the next slide, showing the net profit bridge year-on-year for the first 9 months of 2023. First 9 months net profit was AED 12.4 billion, which is up 58% year-on-year or AED 4.5 billion when excluding the AED 33.1 billion gain on the sale of majority stake in Magnati, which was booked in the first half of 2022. This was primarily driven by core revenue growth of AED 5.6 billion, consisting of 34% year-on-year growth in NII or AED 3.4 billion, helped by strong volume growth, improved margins and benefits from higher benchmark rates. And then also a 46% year-on-year growth in noninterest income or AED 2.2 billion, driven by higher market-related income, increased client activity and sales across FX derivatives and commodities as well as a healthy pickup in fees and commissions, reflecting solid pipeline execution across our fee-generating businesses. This was partly offset by higher operating costs and with continued investments in talent and transformation, and higher impairment charges year-on-year reflecting prudent provisioning. The uptick in taxes mainly reflect growth in international profits. Moving to the third quarter on the next slide. Net profit for third quarter of 2023 was AED 4.3 billion, which was another quarterly record for the group on an underlying basis, it was up 46% year-on-year and 1% sequentially. With regards to the year-on-year trend on the left-hand side of the slide, the bottom line growth of AED 1.38 billion was driven by strong revenue momentum through both higher NII and noninterest income as well as lower impairment charges and partially offset by higher costs and tax. Looking at the quarter-on-quarter bridge on the right-hand side of this page. The net profit growth of 1% sequentially or AED 44 million was mostly driven again by higher NII in light of the recent Fed rate hikes, a more moderate uptick in NFI as well as lower impairment charges due to recoveries. This was again partly offset by higher OpEx, reflecting ongoing investments and higher taxes. On the next slide, we're looking at the underlying operating performance by business segments. We continue to see broad-based revenue and balance sheet growth across all business lines, which once again demonstrates the quality and benefits of our diversified business model. If we look at investment banking, the revenue grew by 45% year-on-year, and it's contributing 43% to group revenue over the first 9 months. This was driven by strong deal pipeline execution across various areas of the business, also new client relationships onboarded and consistent growth in CASA balances. We also benefit from higher benchmark rates and a strong global markets performance. Customer loans and deposits were up 4% and 12% on a year-to-date basis, respectively, again underlining a very strong liquidity position. In the first 9 months, FAB continued to dominate several MENA investment banking league tables, being #1 loan book runner, #1 agent and #1 MENA bank for DCM. And we remain a key player and driver of -- in buoyant capital markets, and we've also received an award as the Best Investment Bank of the Year for the Middle East as supported by the Banker's Investment Banking Awards in 2023. The corporate and commercial banking, revenue was up 51% year-on-year, contributing 25% to group revenue. This was helped by higher interest rates and new cash management mandates in global transaction banking, feeding into higher NII, partially offset by lower fees due to stronger loan origination in the prior year period. Loans and deposits were up 4% and 6%, respectively, and this was driven by new customer acquisitions and increased trade finance activity. Corporate and commercial banking continues to focus on delivering innovative products and sophisticated solutions to both corporate and commercial clients across our core markets and also in various strategic areas. This includes supply chain finance, trade finance as well as payment solutions used in blockchain. In consumer banking, revenue grew 2% year-on-year, contributing 14% of group revenue, and this was driven by solid growth in fees and commissions from especially credit cards and higher spending. This was partially offset by lower NII primarily due to the rollouts of various strategic initiatives to attract new customers through CASA sales and offering bundled product propositions. These initiatives delivered very strong results during the period as evidenced through a 74% growth in new-to-bank customers in the first 9 months compared to the same period in 2022, which translates into greater than 240,000 new customers versus 140,000 in the same period last year. Consumer lending is up 6% year-to-date, while retail deposits saw a robust 26% uptick or AED 17 billion growth as a result of strong CASA acquisitions and the growth in the primary relationships that we're targeting. Private banking revenue grew by 16% year-on-year, and this is primarily attributed to a significant increase in fee income driven by sustained growth of assets under management and net new money from client acquisitions. A lot of new investment products and successful partnerships with leading institutions also gives clients a broader range of products to choose from. Looking at the revenue split by geography. The revenue from domestic operations grew by 39%, while revenue from international operations grew by 32%, contributing 19% to overall group operating income. Moving to the next slide and looking at -- the group presents a rock-solid balance sheet, underpinned by very strong liquidity profile. The total assets are up 7% year-to-date to just under AED 1.2 trillion as of September end, which translates into about USD 323 billion. And group LCR stands comfortably above regulatory requirements at 146%, underlining very strong liquidity for the bank. We saw AED 85 billion of customer deposit inflows during the 9 months from diversified sources as well as diversified geographies, including a AED 55 billion growth in CASA balances, emphasizing FAB's role as an aggregator of both regional and international liquidity. In the third quarter, customer deposits grew AED 40 billion to AED 785 billion, almost equally stemming from CASA at AED 19 billion quarter-on-quarter as well as term deposits of AED 21 billion quarter-on-quarter. As mentioned before, this increase is the result of the strong performance in cash management, as well as the rollout of strategic initiatives to grow primary relationships as well as retail CASA. We continued to effectively deploy liquidity to enhance group returns and to support our clients. Cash and central bank placements grew AED 40 billion year-to-date, primarily as a result of the excess liquidity. And loans grew AED 19 billion on a net basis year-to-date. Sequentially, the loan book was marginally down by AED 4 billion, primarily due to new drawdowns, which were offset by repayments during the quarter. This can be attributed to various factors, including the health and liquidity position of some of our clients who are looking to deleverage in light of the high oil prices as well as the rotation to the bond markets and in some cases, clients prepaying and willing to refinance at lower rates in the future. On the wholesale funding side, it's worth noting that FAB raised AED 7.8 billion of senior wholesale funding. This is an equivalent of about USD 2.1 billion in the first 9 months of the year. We continue to focus on our green and sustainable-linked funding activities by issuing two public green transactions including a AED 1.3 billion Sukuk in July, which was the group's first ever dirham-denominated Green issuance. And during this period, the group also issued a $1 billion Tier 2 bond to further strengthen already robust capital buffers. This issuance achieved the tightest spread of any Tier 2 issuance globally in '23, which is a firm testament to our outstanding credit profile. Turning to the next slide and looking at NIM and NII. The consistent upward NII trajectory you see on the main chart clearly reflects the benefits of Fed rate hikes coming through as well as business growth. In the first 9 months of '23, NII is 34% up year-on-year to AED 13.4 billion. Also, in the 9 months of '23, group NIM widened 20 basis points year-on-year to 1.76%, mainly on the back of rate hike benefits, which are partially offset by the dilutive impact of higher Central Bank placements. As you're aware, the mathematic calculation of the NIM is sensitive to these movements in excess liquidity placed with central banks. And excluding this activity, our group NIM for the first 9 months would stand at around 2.3%. You would have also noticed that the group NIM has been restated this quarter. Although this does not have a material impact, we have reassessed the accounting treatment of our investment portfolio underlining the accounting of certain positions to better reflect the economics. The change has been made retrospectively and there are some further notes on this in Note 32 of the financial statements. The Q3 '23 NIM stands at 1.81%, which is up 8 basis points sequentially. And in terms of outlook, we would expect full year '23 NIM to expand by 15 to 20 basis points year-on-year and on the basis that Fed rates would remain flat by the year-end. Turning to the next slide and looking at NFI. The group presents a robust product platform and a diversified business model, enabling us to deepen our client relationships and to generate revenue from multiple sources. The noninterest income grew 46% year-on-year in the first 9 months contributing 35% to group revenue. And looking at the key drivers, group FX and investment income was up 81% year-on-year to AED 4.7 billion and up 6% sequentially in Q3. And this was driven by healthy sales and trading performance and increased client activity across FX derivatives and commodities. You can see that in 2023, we produced roughly AED 1.5 billion of that revenue stream every quarter, which is a step-up from the previous year. Although there's market components, this is also driven by the positive momentum we are generating in global markets across our various products and when dealing with our customers. On the bottom right-hand side of the slide, you can see that the fees and commissions are up 8% over last year's comparison period. What is interesting to note here is that this growth was primarily driven by other fees and commissions, which were up 57% year-on-year and contributing 25% to the total fee mix, and this is compared to 18% in the prior period last year. This primarily reflects higher investment banking fees and deal pipeline execution in a relatively dynamic regional capital market landscape. Improvement in our fee mix should continue in line with our strategic focus, which is on deepening client relationships and in strengthening our fee generation capabilities. On the next slide, looking at the OpEx trend, you can see that the 9 months current year OpEx was up 11%, demonstrating the continued investment in talent, also in our systems and technology as well as to drive our business growth and to create future efficiencies. The group delivered positive jaws with 9-month '23 cost/income ratio improving to 25.4%. And this is helped by revenue growth, especially, and it is against 30.9% cost-income ratio, excluding the Magnati gains of last year. Sequentially, OpEx was up 4% with our continued investment in talent and transformation. On the next slide, you can see that the group's asset quality remains strong, and this is despite the higher interest rate environment. Impairment charges for the first 9 months stood at AED 2.1 billion, which is up 20% year-on-year. Looking at the sequential trends, impairment charges in Q3 were actually lower quarter-on-quarter due to higher recoveries during the period with AED 154 million of recoveries into Q3 versus AED 95 million in Q2. Although annualized cost of risk is currently well below guidance at 57 bps versus the -- less than 80 bps that we've guided, we remain cautious in the context of lingering global uncertainties and a higher for longer interest rate environment. NPLs were AED 19.2 billion as of September end, and this is compared to AED 18.4 billion, the previous quarter. The increase was mainly due to a few corporate downgrades in our international book. Otherwise, NPL formation remained relatively subdued during the period with no signs of early stress in particular sectors within the portfolio. Provision coverage is adequate and well above our guidance of 97% as we continue our prudent approach towards provisioning. Turning to the next slide and looking at capital ratios and CET1 progression. The capital accretion year-to-date was very strong with CET1 adding 160 basis points year-to-date from 12.6% in December '22 to 14.2% as of September end 2023, which is well above guidance. During the third quarter, CET1 was up 60 basis points, driven by higher retained earnings and partially offset by balance sheet growth and other movements. Risk-weighted assets stood at AED 586 billion, only showing moderate year-to-date growth of 2% or AED 14 billion, and this is versus a 7% growth in assets of AED 76 billion. And on the next slide, just to cover the financial guidance, and our financial guidance for the full year in 2023 remains unchanged. And we're tracking in line or well ahead of all key metrics as of September end. In terms of outlook, we remain cautiously optimistic in light of heightened global uncertainty, and the higher-for-longer interest rate environment. But having said that, we still remain confident about the longer-term outlook for the region, underpinned by strong GDP formation, continued reforms as well as recent economic developments which are further bolstering the region's role as a strategic enabler for global trade and investments. Our diversified business model, our balance sheet strength and our financial resilience are enduring points of differentiation for our stakeholders. We are quite confident in our ability to navigate challenges with our resilience and adaptability as well as to execute on our strategic priorities and to deliver sustainable shareholder returns. Last, but not least, we can't end the presentation without actually mentioning the flagship event of the year. We look forward to showcasing our leadership in the area of sustainability at the upcoming COP28 Forum, which will be hosted in the UAE at the end of November. As a regional pace setter for sustainability, FAB has been selected as a strategic pathway partner of COP28, and we've recently released a 6-point agenda, focusing on several strategic areas, which will enable us to meaningfully contribute to a more sustainable future for all. It's worth highlighting that the group's progress in the area of sustainable finance where FAB has facilitated over USD 27 billion worth of sustainable projects since 2022, which we use as our baseline year. And this means that we've already achieved 36% of our 2030 targets of USD 75 billion in just less than 2 years. And this speaks to our market-leading capabilities and the accelerated momentum that we're witnessing in this space across the region. Just to wrap up and before we move into Q&A, I'd just like to emphasize again that we're very happy that we've produced another record results for the 9 months of '23, and this is really underpinned by our excellent progress against our strategic priorities, that our rock-solid balance sheet foundation, our superior credit rating of AA-, our diversified franchise across businesses as well as products and geographies and these are among the differentiated positions of strength and help us to navigate the evolving environment and to showcase the resilience that we have as an institution through all cycles. In short, FAB remains ideally positioned to deliver strong earnings in 2023 and beyond, and we continue to be laser-focused on delivering sustainable shareholder returns. So with that, we can move to Q&A.

[Operator Instructions] Our first question for today comes from Waleed Mohsin of Goldman Sachs.

Three questions, please, from my side. First, if you look at the year-to-date lending, much of the growth is coming from lending to banks or lending to FIs. I just wanted to understand the strategy over here, how profitable is this lending? And is this lending is mostly to regional or international banks? So any color on that will be extremely helpful. Secondly, if we look at your NPL stock, you briefly touched upon it, it increased because of international exposures. If you could kindly talk about which sectors in the international book are driving this? Is this FI? And then if you could also talk about the drop in provision coverage, there's a small drop this quarter. And my third and final question is on the buildup of capital, which has been quite significant. You are sitting well above your target for this year. So the excess capital, should we think of this as an opportunity for the bank to pay a higher dividend? Or is this capital set aside for inorganic growth?

So I'll try and take questions 1 and 3, and Pradeep can take your question on NPL and coverage. In terms of the lending, on a net basis, you do see some sort of sequential deterioration in terms of the overall book. But I think as we were speaking last quarter, this is something that we were expecting in terms of a lot of cash formation on the back of higher oil prices. And we already started seeing a bit of that deleveraging, that cash being used to deleverage by, especially some of the bigger government-related entities. So when we then look at where we see formation in terms of lending, we obviously have some trade finance, which is a portion of the growth in lending as well as from the banks. It's a bit of a broad-based internationally. I mean, we do try and keep our books reasonably well diversified and also to protect our asset quality and going against higher ratings. We, I would say, on a gross basis, are seeing demand and we're seeing good loan formation still and pipeline. But clearly, with the size of the balance sheet that we're running and the size of some of the bigger positions, any sort of paybacks from the global -- or the government-related entities can have quite a significant impact on the net basis. But underlying, there is still a healthy business. Now, of course, we are in an environment of higher rates. We are in a more unstable environment, both macro and politically. And this is something that we're therefore watching going through into the next quarter and beyond. You asked about capital and I would say here, yes, it's been very good capital formation. As I've said in previous calls, we take a view on dividends at the end of the year. We will reflect on what our strategic sort of growth looks like next year, what GDP expectations are at the moment. They look pretty good. I think that we are now still looking at next year at about 4.2% of GDP growth. So we expect multiples of that. So really, I would look more at any capital formation, we will look at, how we can support organic growth and potentially if there are any sort of regulatory changes as well as if we have what we see evolving in the fourth quarter in terms of environment and -- yes, business environment. But maybe, Pradeep, you can say something about the NPLs and the coverage.

Yes, sure. Just to shed some lights on the NPL increase during the quarter. The NPL ratio declined to 3.9% from 3.7% the previous quarter. The flow was largely due to some real estate lease facilities, followed by some general flow in the consumer banking sector through credit card and PI and personal loans. With respect to the provision coverage, the total provision coverage is at 97%. It's stable and above our guidance of 90%. It has dropped marginally due to new deal flows and certain write-offs on fully provided accounts during the quarter. We do expect total provision coverage ratio to remain above 90% underlining our starts to maintain adequate provisions on the noncore earning assets.

Perfect. That's very clear. Just one follow-up, if I could. Just on loan growth. Lars, on your comments around, obviously, cash generation in the economy, and we can see it in terms of the public sector being in a very healthy state. Do you think that presents downside to your kind of growth expectations for this year or the year after? I know you've not communicated guidance for next year. But is that something which will go downside risk? Are you comfortable with the pipeline that you have between FIs and the private sector?

Yes. I think we're not giving guidance on the sort of GDP growth in terms of how we are going to see this evolve. But at the moment, we are still pretty comfortable. So again, let's have a look at how the fourth quarter evolves also in the light of the context that we're living in. So we are cautiously optimistic. I think that's the phrase I used in terms of also the future. But again, this is something that will evolve.

Our next question comes from Naresh Bilandani of JPMorgan.

It's Naresh Bilandani from JPMorgan. I have two questions, please. One is, I'd be keen to get some insight into the sizable gains that you have booked on the FVTPL portfolio. It would be very helpful for us if you can please explain what is the type of the risk that you are taking to achieve these gains? And how should we think of gains on these lines on a more sustainable basis? In some sense, if you can throw some light on how much of this income is coming from flow versus prop business, that would be very helpful. That's one. And second is, I'm just keen to understand the reasoning behind the lack of change in the cost of risk despite year-to-date run rate being much below the guidance. So can you please just explain what scenario are you building in to maintain this elevated cost of risk? And what in your view should be a realistic level that could potentially be achieved by the year-end?

So maybe, Pradeep, do you want to take the cost of risk?

Yes. Sure. On the cost of risk, I mean, obviously, I think that the world we're in right now, I think, is very different than where it was a few weeks ago. I think with the heightened geopolitical tensions, our view is that if this is prolonged, this could potentially hurt global growth, number one. Obviously, if there are some disruptions to the energy supply chain, that could hit inflation and also, the trajectory of interest rates between now and the end of the year and also for 2024 as well. Look, I mean, we continue to maintain a very conservative guidance of 80 basis points due to the potential deterioration in the credit cycle and also due to the geopolitical landscape and also the volatility in the macroeconomic environment. So that's the reason why we are continuing with our conservative stance of 80 basis points because we do feel that between now and the end of the year, there are certain risks.

If I may please follow up Pradeep, the below 80 bps -- sorry for the interruption, Lars, but I'm just keen to understand because the below 80 bps cost of risk guidance was set at the start of the year and that kind of has been maintained. And the reason sort of like the geopolitical risk that has evolved, that's very recent. So I'm just trying to understand sort of like the scenario in which such an elevated cost of risk plays out into the next 2 months.

Yes. Let me explain that. I think we were having internal discussions around this in terms of should this be revised, especially with what the recent events which have happened, that's the reason why we've taken the decision is to keep our guidance at 80.

Just coming at your fair value through P&L question. I mean, materially, the bulk of our investment portfolio is actually booked on an AFS basis, right? So we've got about 80%. And it's only about 20% of the book that's actually going through P&L. And it's not such a material number. I think on a year-to-date basis, it's around about AED 150 million. So I don't think that this is something that is significantly driving the results. I mean, we've seen, obviously, with volatility in rates. Even here, the book is actually from an interest rate perspective hedged. And we have some credit spreads playing out, but this is very much more running through AFS reserves. So the fair value through P&L really is not that significant piece of the book.

But the gain that you have booked in the -- in this line, in the investments and derivatives line, then what is -- could you please tell me what is driving the sizable gain then?

Yes.

Because I have a number of AED 1.36 billion here, yes.

This is something where -- that we have been driving in terms of also our global market activities, really being very focused on FX and derivatives and commodities and building out our customer relationships. And I think, here, large bulk of what's happening there is that rather than prop trading.

Okay. And is this number -- like how should we think of the sustainability number? Because I think the key beat to the consensus is largely being driven by this line, where I think the broader investment community doesn't have like real visibility on how should we be forecasting this line. So is there any thoughts that you can share on this, please?

Yes. I think we talked about this also in the last quarter where we said in terms of us diversifying our business, maturing our business, whether it's in investment bank, global markets, wherever, here, we actually are, therefore, expecting to see more repeatability of even a line item like this. In terms of the AED 1.5 billion that we're seeing, this is -- and we talked last quarter about potentially sort of 50% or 60% repeatability. So that's what we're trying to drive at. I mean, there will always be some volatility, clearly, but we're trying to more and more have the recurring parts maturing and developing.

Our next question comes from Aybek Islamov from HSBC.

Yes. Apologies. I was on mute, yes. So thank you for the conference call. Some of my questions have been answered, but I would like to focus a little bit on the investment income one more time. So when we look at your securities composition, you have almost AED 40 billion in bond portfolio, which has held at fair value through income statement. With the bond yield rising so much towards the end of the third quarter, it is still surprising to see these investment gains in your P&L. Like -- so if I may kind of put the question the way, under what circumstances do you expect to see investment losses, right? Is it when the yields fall? Some more color would be helpful here. But also a follow-on question is, what percentage of your gains that you booked in the P&L, this time, what percentage is in cash versus noncash? Can you explain that to us as well. That would be very helpful. And then the second question is about your loan growth. So in the third quarter, it looks like your public sector loan exposure -- loan book dropped a little bit, so sequentially. So what does it mean? What's driving that drop in your public sector loans? And what should we expect going forward?

So I think on the investment portfolio again, in terms of -- we clearly have three ways of booking and some of it is through P&L. The bulk of it is AFS, which runs through OCI. And then we have a very small piece of held to maturity, which is really only about AED 4 billion of the overall. Now if your question is how much of that unrecognized mark-to-market are we sitting on, then it is really -- it's about AED 300 million worth on that portfolio of held to maturity. In terms of the AFS and the sensitivity of this, and we do materially hedge for interest rate movements. So really where you're going to see impacts are from credit spread movements. I think that's what drives it. That's very much the case for what we have under AFS as well as fair value through P&L. The question on loans, I think I answered it under Waleed where -- what we have been seeing, and this is something we started seeing in Q2, and we're continuing to see it in Q3, is effectively the large entities that are sitting on a lot of cash, utilizing that cash to deleverage. I would expect at some point that, that utilization will stop. And that's why also for next year, maybe for this year, you do still see -- and you see that also in our loan guidance being maintained at mid-single digits. But for next year, we would expect the deleveraging to have played its way out and for us to get back into more of a normal cycle of growth related to GDP.

Our next question comes from Olga Veselova from Bank of America.

I have several questions today. My first question is on effective tax rate. I think we discussed it during previous calls, but could you please update us what is active rate, tax rate, shall we assume for 2024? And do you see risks that this effective rate will go up in 2025? My second question is on your lending maturity. I think in your full year results, not in quarterly, but in annual results, the bank disclosed its contractual maturity of the balance sheet. We noticed that 68% of loans have less than 3 months maturity. Can you maybe comment on that? And I noticed that Interbank is not part of this loan book. So why do you think maturity is so short? And my third question is on cross-border syndicated loans. Do you provide cross-border syndicated loans to Saudi banks? And how efficient is cross-border interbank market? If you do provide, could you please guide us on the level of market pricing of this type of product?